The 6 C's of Commercial Lending

In Commercial Lending, bankers from around the world use the 6 Cs of commercial mortgage lending to help in determining the eligibility of commercial loan application packages. Some non-bank lenders, private lenders, venture capitalists and hard money lenders may also refer to the 6 C's as well. Therefore, make sure you have your presentation fully ready when you go to apply for a loan.

The 6 C's of commercial lending are:

Capital:

Company’s capitalization, reserves, statement, net worth, etc.

Capacity:

Borrowers should demonstrate the ability to repay the loan.

Cash flow:

Borrowers should show a debt-service-coverage ratio of at least 1.30 and above

Character:

Borrower's character, integrity and professionalism. ​Condition:

Business analysis and valuation, as well as a feasibility study of competition and the marketplace.

Collateral:

Borrowers should provide a strong collateral consideration and other securities.

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